R. v. TSANG CHI HO and Others

Criminal Appeal No. 616 of 1996

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H E A D N O T E

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S.24 Theft Ordinance Cap. 210

Meaning of "undertake ...... for the benefit of another" considered.

Necessary to prove that the undertaking was 'for the benefit of another'. This involves at least an awareness on the part of the accused that he undertook the act for the benefit of another and not simply for his own benefit.

IN THE COURT OF APPEAL

1996, No. 616

(Criminal)

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J U D G M E N T

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Mortimer JA (giving the judgment of the Court): On 7 October 1996 the three applicants were convicted after trial by Deputy Judge Jenkins in the District Court. There were eight accused, all were convicted of offences relating to the theft and subsequent disposal of a consignment of antibiotics from the air cargo terminal at Kai Tak on 7 November 1995.

2. The 1st applicant, Tsang Chi-ho (D3), was convicted of handling and sentenced to 2 1/2 years imprisonment. The 2nd applicant, Lo Hok-man (D6), was convicted of theft and sentenced to 3 years imprisonment. The 3rd applicant, Chan Ka-lok (D8), was convicted of handling and sentenced to a training centre but he has been on bail pending appeal since 28 January 1997.

3. Each of the applicants applies for leave to appeal against his conviction and sentence.

The facts

4. The offences arose out of an agreement between workers at the air cargo terminal and lorry drivers who worked for a transport company which collected goods from the terminal. The plan was to steal perfumes and cosmetics. The antibiotics were stolen in error. D6 was a warehouse man at the air cargo terminal. He and a forklift driver stole the goods by loading them onto a lorry driven by another accused which was at the terminal collecting a legitimate consignment. Another accused obtained forged documents to get the stolen goods out of the security area. A further air cargo worker who was off duty outside the terminal liaised with all those involved.

5. The stolen goods were taken to Hak Po Street and unloaded onto the pavement. There it was discovered that the cartons contained antibiotics. D3 was employed by the same transport company whose lorry had been used to steal the goods. He was telephoned by D4, an ex employee of the company. He was asked to help and the stolen goods were placed in D3's van. D4 told D3 that he needed a place to store the goods. Consequently D3 contacted D8 at his flat and the goods were taken there. D3 and D8 helped take them into the flat while D4 kept lookout. After about 20 cartons had been removed, D4 was informed by another accused that he had found a buyer. D3 and D4 left with the remaining cartons on board D3's van. They were delivered to another accused and have never been recovered.

6. D3 was arrested on 14 November 1995. D6 was arrested on 21 November 1995 and shortly thereafter D8's flat was searched. The antibiotics from D8's flat were found in the rubbish collection plant in the basement. D8 had disappeared and he was not arrested until 26 April 1996.

D3's application on conviction

7. After his arrest D3 made statements to the police which were admitted into evidence. He also gave evidence at trial on his own behalf. His defence was that he neither knew nor believed that the goods were stolen and that he was simply assisting his former colleague to temporarily house them. As this applicant never admitted the requisite knowledge or belief in either in his statements or evidence, it was submitted on his behalf by Mr Halley that on this evidence it was not open to the judge to find that D3 "must have at least believed that the goods were stolen".

8. Whereas we would be prepared to accept that the judge may have been in error in assuming that D4 - as one of his former colleagues - would have been prepared to tell him the background of the goods, this is not a matter which invalidates the decision which is based upon the whole of the circumstances. These can be summarised:

(i) D4 (the former colleague) had the goods on board D2's company vehicle at night.

(ii) D3 was asked to take the goods onto his vehicle temporarily but was told that they could not be kept there.

(iii) D4 asked D3 to find somewhere to keep them.

(iv) Eventually they were taken to D8's home at midnight when part were unloaded and put into a residential flat. Some were then reloaded and taken elsewhere.

(v) That D3 never raised any queries about the goods or what was being done with them.

9. The judge disbelieved the applicant's account given in evidence but he did not convict him on that basis. He convicted him on proof of belief on the whole of the evidence. This was evidence upon which the judge was entitled to make the finding. For these reasons this application is refused.

D6's application on conviction

10. D6 appears in person. He contends that he was convicted on his confession statement (Exhibit P15) whereas he never admitted guilt, only knowledge of the events. This is not correct. In Exhibit P15 he admits being asked to find a forklift driver to move a batch of goods which were to be stolen and being promised a share of the proceeds for his trouble. In answer 14 of the same document he said:

"Around 4.30 pm on 7.11.1995 he paged me telling me to get Shing Mo to transport the goods at Area E to Area H. I went to the floor goods area near Area E and found Shing Mo and then informed him to transport the goods to module H."

Later he was asked about his reference to the arrangement "to take out goods":

"Q: Do you know the meaning of 'to take out goods'?

A: It refers to steal goods."

11. At trial this applicant complained that his statement was not made voluntarily but this was rejected by the judge.

12. For these reasons D6's application is refused.

D8's application on conviction

13. After his arrest on 26 April 1996 D8 made a statement to the police in which he said that when the goods were delivered to his flat after being asked to accommodate them by a person not involved in the case, he neither knew nor believed they were stolen. He asked what the goods were but was not told. Four days later, however, he was told that the person who delivered the goods had been arrested for their theft. He opened the cartons to find that they contained capsules. Thinking they were dangerous drugs he disposed of them at the refuse collection point on the ground floor of the building where they were later found.

14. In his evidence at the trial D8 unsuccessfully challenged the voluntary nature of his interview and testified that he had not disposed of the goods as they had been put in the refuse area by his father's girlfriend.

15. In his reasons for verdict the judge accepted that in spite of the suspicious circumstances, it had not been proved that he knew or believed the goods were stolen when he received them.

The finding of guilt

16. However, the judge accepted that the applicant was told that the other defendants had been arrested in connection with the theft and that from that moment he believed that the goods had been stolen and that he promptly disposed of them. The judge convicted the applicant of handling on this basis:

"In disposing of them, he clearly did so dishonestly. He wanted to be rid of the goods and did get rid of them regardless of the rights of the true owner. There was no attempt, for example, to locate the owner or for that matter, to contact the police.

For these reasons, I find the 8th defendant guilty ... ."

17. Stripped of irrelevance the indictment alleged that this applicant handled stolen goods in that he "dishonestly undertook ... the ... disposal ... of stolen goods ... for the benefit of another". The judge did not find that the applicant disposed of the goods for the benefit of another. He never considered the point.

The applicant's case

18. Mr Selwyn Au, who appears for this applicant, advances one ground of appeal:

(1) There is no evidence to support a conviction of handling stolen goods.

(a) In disposing of the goods, the applicant was worried that they were dangerous drugs, there was no dishonest intent.

(b) There is no evidence to show that the applicant disposed of the goods for the benefit of another.

19. Mr Au points out that in his reasons for verdict the judge omitted to consider whether the applicant had been proved to have undertaken the disposal of the goods for the benefit of another. As this is an essential ingredient of the offence, he submits the appeal must be allowed.

The Crown case

20. Mr Francis Lo, for the Crown, submits that the judge found that the applicant disposed of the goods dishonestly when he knew that they were stolen and that this act must have been for the benefit of either the thieves or the receivers or both as well as for himself. In these circumstances he contends that the judge's reasons are sufficient. Alternatively, if it was necessary for the judge to specifically examine whether the disposal was for the benefit of another, the test is purely objective and even if the judge had properly directed himself on the point, he would inevitably have concluded that the applicant was guilty of the offence and therefore this Court ought to dismiss the appeal by applying the proviso to s. 83(1) of the Criminal Procedure Ordinance.

What must be proved to establish guilt?

21. The point is novel and devoid of direct authority. Section 24 of the Theft Ordinance is taken exactly from s.22 of the Theft Act 1968 in the United Kingdom. It provides:

"24. Handling stolen goods

(1) A person handles stolen goods if (otherwise than in the course of the stealing) knowing or believing them to be stolen goods he dishonestly receives the goods, or dishonestly undertakes or assists in their retention, removal, disposal or realisation by or for the benefit of another person, or if he arranges to do so.

(2) Any person who handles stolen goods shall be guilty of an offence and shall be liable on conviction upon indictment to imprisonment for 14 years."

It is necessary to first consider the ingredients of the offence which must be proved to establish guilt under the second part of the section. Stated broadly the ingredients are as follows:

The necessary knowledge or belief

(1) That the accused knew or believed that the goods were stolen.

The act

(2) That he undertook the disposal of the goods for the benefit of another.

The mental element

(3) That in undertaking the disposal for the benefit of another he acted dishonestly.

22. As the judge failed to consider or make any finding whether the applicant did the necessary act for the benefit of another - an essential ingredient - and failed to consider dishonesty related to that act, leave must be given to appeal and subject to an application of the proviso to s. 83(1) of the Criminal Procedure Ordinance, Cap 221, the appeal must be allowed.

Should the proviso be applied?

23. If the conviction is to stand, the court must be satisfied that if the judge had properly directed himself in law, he would, on the evidence, inevitably have convicted the applicant of the offence.

24. This raises two questions. The first is what are the proper directions of law in the circumstances of this case?

25. The true meaning of the words "undertake ... their retention, removal, disposal or realisation ... for the benefit of another person ..." must be determined. The offence is committed if the accused undertakes the disposal of the goods for the benefit of another. Not it is to be noted simply disposes of them for the benefit of some another. Assistance on the meaning of undertakes may be gained from an examination of the evil against which the section is directed. The scope of the offence was enlarged in 1968 to criminalise the acts of those who helped the thief or the receiver to profit from their offence. Hence the words "undertakes ... in the doing of certain things ... for the benefit of another". That other is usually the thief or the receiver. Against this background, undertakes is an ordinary English word with more than one shade of meaning but the true meaning can only be ascribed to it in its particular context. This context does not permit of lengthy analysis or discussion. In our judgment, it means simply to accept the obligation or the responsibility to do the necessary act. The undertaking may precede the act or may be concurrent with it but the dishonesty must be related to the undertaking to do the act for the benefit of another.

26. It was suggested in argument that whether the act was for the benefit of another is to be established objectively. This we cannot accept. The question whether or not guilt is established cannot depend upon the outcome of some further inquiry. It is the nature of the act done by the accused together with the necessary mental element which establishes the offence. Therefore, where it is not obviously established that the accused has undertaken the act for the benefit of another, the Crown must prove at least an awareness on the part of the accused that his act is for the benefit of another. Whether this is sufficient will depend upon the whole of the evidence.

27. The point is unlikely to cause difficult where the undertaking is made with a person to be benefited. A problem may arise in cases such as the present where a person comes into possession of the goods, innocently undertaking to retain them and later, after acquiring the guilty knowledge, undertakes a different act - disposal.

28. So, for example, if the accused comes into possession of goods innocently and undertakes to realise them by selling but learns that the goods are stolen before he makes the sale and yet goes ahead with it, it is likely that guilt would be established.

29. In summary therefore, in order to establish the offence of handling by undertaking the retention, removal, disposal or realisation of stolen goods for the benefit of another person after innocent receipt, the Crown must establish guilty knowledge before the undertaking of the necessary act, and dishonesty in the doing of it. Finally, it must be established that the accused undertakes the act for the benefit of another. Proof that the accused undertakes the act for the benefit of another rarely causes difficulty but where there is doubt the Crown must prove at least an awareness by the accused that when in undertaking the act it was for the benefit of another. This will be more easily proved if the act performed is the same as that undertaken with the person to be benefited.

Conclusion

30. We now turn to the second and crucial question. Had the judge properly directed himself, would a conviction have been inevitable on the evidence before him?

31. Here, the applicant innocently undertook to retain the goods. When he learnt that they were stolen, he chose to dispose of them, thinking that they were dangerous drugs. On the judge's findings the applicant must have thought he had been placed in a desperate position. He had been left in possession of a huge quantity of dangerous drugs. In the absence of a finding by the judge there must be doubt whether in disposing of these goods the applicant had in mind anything but his own predicament. It cannot be said that a finding that he undertook the disposal for the benefit of another was inevitable.

32. For these reasons, we give the applicant leave to appeal. We treat this application as the appeal. We do not apply the proviso to s. 83(1) of the Criminal Procedure Ordinance and we allow the appeal and quash the conviction.

33. Before leaving D8's case we note in passing that he would have had no defence on his own account to a charge of criminal damage to the stolen drugs. (S.60 Crimes Ordinance, Cap. 200)

D3's application on sentence

34. The judge took into account D3's clear record and sentenced him to 2 1/2 years imprisonment having regard to the serious nature of the offence. Mr Halley submits that this sentence is manifestly excessive because there is no evidence that this applicant's part was premeditated. He was contacted to assist after the theft had taken place. Further, he points out that there was no evidence that this applicant knew that the goods came from the airport.

35. Undoubtedly, 2 1/2 years imprisonment for a man of good character is a heavy sentence. However, the applicant must have known that he was assisting in serious crime from the quantity of goods involved and his assistance, even if not premeditated, was substantial. Mr Halley compares the sentence of 2 1/2 years with the sentence of 3 years for those guilty of the theft. This latter point falls to the ground because the sentence of 3 years as a starting point for this planned, professional and serious offence involving a large number of people was excessively lenient.

36. We are unable to accept that the sentence of 2 1/2 years is manifestly excessive or wrong in principle. The application is refused.

D6's application on sentence

37. This applicant also asks for his sentence to be reduced. He was a man of good character but he played a central role in the offence. It is clear from the manner in which he presented his application personally that he is a man who would be easily influenced by others. This sentence was lenient for such a serious offence but in his case it was justified. His role although central was certainly not as a prime mover or as one of the planners. Having regard to his part in the offence and his personal circumstances, the sentence was justified. It was neither wrong in principle nor manifestly excessive. The application is refused.